Chinese crypto traders look for other ways to trade

Ray views himself as a maverick and refuses to identify his surname. After Beijing banned investing in crypto, he is still determined to keep going while many Chinese shut down their digital wallets. He received a notice from the crypto exchange stating that they would shut his account by the end of this year. Besides that, he said that he would open an account on a decentralized exchange instead. 

China’s campaign against crypto resulted in shutting down bitcoin mining operations in China at the beginning of May. That co-occurred with the growth of DeFi (decentralized finance). It allows clients to trade with each other without any mediator, like a bank or a broker, making it harder to block. One Chinese investor with an overseas bank account said that he still regularly trade crypto. He added that he could not imagine how authorities could stop him when the idea of the crypto industry is to avoid centralized control. 

Overview

According to a research firm, Chainalysis, China’s share of global transactions topped at 15% at the beginning of November in 2019. However, it started to fall to 5% at the beginning of June in 2021. In these periods, China had 257bn of crypto activity, which ranked the highest in Asia. Forty-nine percent of the total amount was through DeFi platforms.

Chainalysis said that one of the leading DeFi exchanges, Uniswap, is now considered the second most significant exchange in Asia by transaction volume. According to experts, some existing crypto holders turn to DeFi to maintain trading while the latest restrictions prevent new users from entering the crypto markets.

Deng Jianpeng is the director of the Finance, Science, and Technology Research Centre at the Central University of Finance and Economics. According to him, the band would stop most trading. Adding that some people would always try to find new investment routes. For example, they will start using decentralized exchanges or an overseas platform.